EPA sued over Exxon’s liability coverage for offshore Liza project

The President of the Transparency Institute of Guyana Inc (TIGI), Fredericks Collins, and another Guyanese citizen, Godfrey Whyte, have applied to the High Court for the Environmental Protection Agency (EPA) to enforce the clause of liability in permits issued to ExxonMobil Guyana for its offshore oil operations.

The case was filed in the High Court on September 13 by lawyers Seenath Jairam SC, Melinda Janki and Abiola Wong-Inniss.

A statement from litigants says the remedy to the courts is to ensure that the company takes full financial responsibility for harm, loss and damage to the environment. ExxonMobil’s local subsidiary, Esso, has agreed in the permit to provide insurance and unlimited indemnity from the parent company to cover any loss and environmental damage that may result from a well blowout, oil spill or other failures in the Liza 1 development project in the Stabroek block in Guyana. .

Any “accident” in its operations will affect not only Guyana and Guyanese but most countries in the Caribbean and possibly beyond the region, the statement noted. He added that Esso is registered overseas and its financial situation is unclear as it has filed what it calls “branch” accounts in Guyana. (In separate litigation, a Guyanese citizen asked the court to order Esso to comply with Guyanese corporate law and file full accounts.)

Under the law of the land at present, every company or company is a separate legal entity from its shareholders and creditors must look to the company/company to liquidate its debts, however alarming its financial situation may be, and not to its billionaire shareholders. .

“Communities in Guyana are learning from major disasters such as BP Deep Water Horizon in 2010, which cost the company over $65 billion and destroyed the environment and livelihoods. Unlike the United States of America, Guyana has no petroleum experience and lacks the oil/gas experts, engineers, and other technical personnel needed to run a petroleum sector.

Guyana also lacks the infrastructure to quickly plug a well and mitigate the damage caused by a possible oil disaster. A World Bank project to build capacity was downgraded to moderately unsatisfactory,” the litigants said in their statement.

According to their fixed date petition, Collins and Whyte are asking the court for a declaration that the EPA as the sole competent authority under the Environmental Protection Act (EP-ACT) to enforce the provisions of the permits. environmental certificates issued to Esso Exploration and Production Guyana Limited (EEPGL).

They are asking the court for a mandamus order to the EPA requiring it to immediately produce certified copies of the insurance required under the environmental permit issued to EEPGL. In particular, they ask for a copy of the environmental civil liability insurance policies, a summary of the environmental civil liability policies; proof that the insurer is authorized to provide insurance in Guyana; proof of authorization from the institution or parent (insurers) to provide insurance under the conditions set out in the permit; proof of the financial soundness of the insurers; and proof that the insurer has an A+ grade rating assigned to it by the Better Business Bureau under the terms set out in the license.

In addition, the litigants are also asking the court to compel the EPA to deliver certified copies of the legally binding agreements set forth in the permit. These agreements include the unlimited financial commitment of ExxonMobil Corporation, Esso’s ultimate parent company, to provide adequate financial resources to Esso to pay or meet its environmental obligations with respect to the Stabroek block, including its liabilities under the condition 14.1 of the permit for all costs associated with cleanup, restoration and damage caused by the spill of any contaminants and its obligations to compensate all persons who suffer loss or damage.

They are also seeking to compel the EPA to turn over agreements with ExxonMobil Corporation that prove it took unlimited indemnity as the parent company in addition to evidence of agreements to show that the parent company assumes all liability in the event of environmental disaster.

Collins and Whyte also ask the court to order the EPA to “immediately file with the court certified copies of the unlimited covenants and indemnities required from the unidentified joint venturers under License Condition 14.10; alternatively, a mandamus order directed to the Agency requiring it to immediately cancel the Permit in accordance with Condition 14.8; and a restraining order directed to the Agency prohibiting the Agency from granting any environmental permits to Esso (or its successors and assigns ) which does not include provisions for financial assurance and liability for pollution damage.”

They also want a statement that unlimited liability is imposed on the parent company for costs associated with cleanup, restoration, and pollution compensation, including environmental obligations from the EPA and the State of Guyana. .

They argue that the EPA has a legal obligation to revoke all permits issued to EEPGL if it has failed to meet the requirements set out in the document. They further argue that the EPA violated its mandate by allowing EEPGL to operate without insurance, as stated in the permit.

The duo, through their lawyers, told the court “…the agency, through its human minds, including its leaders, has failed or omitted to discharge or show that it has discharged his legal duties and/or obligations, which amounts to mischief in public by them and in failing to act or failing to act, acted unreasonably, irregularly or improperly and/or abused his power “.

In her statement, Collins said, “I can’t even drive my car without insurance. It is therefore incomprehensible that the government allows Esso to operate without any form of insurance. An oil spill would be devastating to our country and region, as many Guyanese and Caribbean people depend on the ocean for their livelihoods. That’s why we’ve decided that now is the time to take the matter to court for redress.

There are currently six cases before the courts relating to the operations of ExxonMobil subsidiary Esso in Guyana.